There is quite a buzz around WiMax, especially so in developing nations where the high cost of rolling out fixed-line telecoms has left them considerably lower down the broadband pecking order than their First World counterparts.
But is it going to live up to all the expectations?
The Worldwide Interoperability for Microwave Access (or better known as WiMax) fills somewhat of a middle ground in the telecoms world. It is designed from the ground up to be a competing technology with fixed-line DSL by offering data rates in the region of tens of megabits per second at a fraction of the roll-out cost.
WiMax belongs to the IEEE802.16 family of standards known as Wireless Metropolitan Area Networks. It is similar to WiFi but on a much larger scale. A WiMax cell can theoretically have a range of up to 50km, though in practice it is bound to be significantly less than this — maybe in the order of 5km to 10km. Nevertheless, it is enough to build a network that can cover an entire metropolitan area instead of just one small coffee shop. The WiMax standard involves some of the latest advances in telecommunications technology such as AAS beamforming (translation: better coverage) and OFDMA, and comes with all the mobility benefits we have become accustomed to with GSM. All in all, WiMax as a technology provides an elegant solution to the dreaded problem of providing last-mile coverage.
This solution couldn’t be more applicable or timely for South Africa. The South African broadband market is thirsting for bandwidth as it emerges from a period of stunted fixed-line growth due to the dominance of the Telkom monopoly. The launch of the SNO (second network operator) Neotel in August 2006 was hailed as a new era in South African telecoms, but without access to Telkom’s infrastructure it was always going to be too much to ask for the new player to start competing at a point where the end users benefit.
Although we weren’t all able to rush out into stores and buy Neotel ADSL packages, there are other options besides Telkom. Both MTN and Vodacom are offering mobile broadband through their UMTS/3G networks; iBurst provides data rates of up to one megabit per second through a proprietary technology; and MyWireless from Sentech is still around. The good news is that WiMax is just going to spur this growth and open the way for even more broadband providers.
It affords an opportunity for newer and smaller players to enter the market and put forward their own broadband product offerings, as well as for traditional players to reduce their costs and thus reduce prices for the end user. WiMax is potentially a very good thing for all South Africans.
The same is true for Africa as a whole. As a continent, we only accounted for 28,5-million of the world’s 1 270-million fixed lines, a measly 2%, while we have about 14% of the world’s population. This translates into a fixed-line penetration rate of 3,1 per 100 inhabitants, which begins to tell a story when compared with the world average of 19,4 fixed lines per 100 inhabitants.
Basically Africa is an even more desperate case of broadband starvation than South Africa. With spaces being too vast and people too poor and few and far between, traditional fixed-line access mechanisms are simply not cost effective in the African context. They were designed for the wealthy and densely populated European environments from which they originate.
But the developing nations are where all the future growth in the telecoms industry is going to be. With margins growing tighter and tighter and markets becoming more and more saturated in the First World, places such as Africa, India and China are starting to look very appealing.
The major networks are queueing up to get a piece of the action, and those that are already well invested in the developing world are reaping great rewards. This is evident in the eagerness a company like Vodafone showed in its determination to buy out a controlling stake in Hutchinson Essar, India’s third-largest cellphone network. It ended up investing a cool $11,1-billion in the Indian economy — an investment that is sure to reap much reward. Or look at MTN and how successful it has been in driving upwards through Africa and the Middle East. The most risky portfolios, not even thinkable a few years ago, are drawing fantastic confidence from investors and for good reason. MTN looks set to continue its excellent track record and to fill out its position as a dominant network in Africa.
Whatever happens over the next five years, we know that Africa is definitely going to be an exciting place to be from a telecommunications perspective, and WiMax is going to have a big role to play in that, delivering more and more broadband to all of us information-hungry souls.
Look forward in 2008 to getting your Mugg & Bean coffee to go, because you will no longer be bound by WiFi coverage but will be able to surf the internet all the way home. We are no longer living in the age of hot spots — it’s about to start getting hot everywhere!
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